UK watchdog paints gloomier long-term picture for public finances

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LONDON (Reuters) - Britain’s budget watchdog on Tuesday outlined a gloomier picture for the government’s finances in the long term, reflecting recent pledges to increase health spending without tax hikes or spending cuts to pay for it.

The Office for Budget Responsibility (OBR) stuck to its view that the public finances are likely to come under significant pressure from an aging population.

“The long-term outlook for the public finances is less favourable than at the time of our last (fiscal sustainability report) in January 2017,” the OBR said in its report.

This was “more than explained” by the government’s health spending announcement in June.

Last month Prime Minister Theresa May announced a 4 billion pound ($5.3 billion) boost for the National Health Services, to be funded in part by a “Brexit dividend” that the Institute for Fiscal Studies says does not exist.

Finance minister Philip Hammond has indicated that taxpayers will need to foot some of the bill.